The Scientific Beta Report

Transcription

1 The Scientific Beta Report SCIU United States SCID Europe SCIX Asia ex-japan SCIJ Japan Don t just be smart. Be Scientific. OVERVIEW The ETFs are a family of funds that provide core equity exposure to U.S. and international markets. The ETFs may be considered viable alternatives to actively managed funds as they seek to outperform market capitalization weighted indexes by following a methodology rooted in academic research, while preserving the lower costs and transparency of an ETF All data as of 3/3/06 Ticker Gross Expense Ratio Net Expense Ratio Since Fund Inception Year Annualized Since Fund Inception US ETF SCIU 0.35% 0.9% NAV 0.7% Market Price 0.% SBUXRHMN 0.5% Europe ETF SCID 0.38% NAV -5.6% Market Price -5.05% SBRXRHMN -4.73% Asia ex-japan ETF SCIX 0.38% NAV -8.87% Market Price -8.86% SBAXRHMN -9.8% Japan ETF SCIJ 0.38% NAV -0.54% Market Price -0.55% SBJURHMN -0.3% The performance data quoted represents past performance. Past performance does not guarantee future results. The investment return will fluctuate so that an investor s shares, when redeemed, may be worth more or less than their original cost and current performance may be lower or higher than the performance quoted. Indices are unmanaged and do not include the effect of fees, expenses, or sales charges. One cannot invest directly in an index. For performance data current to the most recent month end, please call -888-gxfund- or visit our website at Pursuant to an Expense Limitation Agreement, the Adviser has agreed to reimburse or waive fees and/or limit Fund expenses to the extent necessary to assure that the operating expenses of the Fund will not exceed 0.9% of the Fund s average daily net assets per year until at least March, 07. Total Annual Fund Operating Expenses apply after Fee Waiver and/or Expense Reimbursement

2 US ETF SCIU SINCE INCEPTION¹ PERFORMANCE AS OF 3/3/06 5% -5% - -5% US ETF SciBeta United States Multi-Beta Multi-Strategy ERC S&P 500 May 5 Jul 5 Oct 5 Jan 6 Mar 6 Source: ERI Scientific Beta and Bloomberg, March 06.64% % 0.76%.69% -0.87% SCIU HISTORICAL ALLOCATION SINCE INCEPTION¹ Source: ERI Scientific Beta, March % 7.57% % 8.6% % 0.3% % 4. Low Volatility.43% -0.3 ² 7.57% 8.77% 5.6% 8.49% SCIU SCIU TOP 0 HOLDINGS Source: Global X Funds and S&P. As of 3/3/6. Total 7.63% Since inception of SCIU ETF, 5//5. index is represented by the Scientific Beta Multi-Strategy for the relevant region. The index represents the performance of the Scientific Beta Multi-strategy weighting scheme without apply factor tilts. 0.5% 0.7% 0.06%.37%.35% 0.7% 0.06% Q 05 Q3 05 Q4 05 S&P % 8.76% American Water Works Co Inc. 0.9 ConAgra Foods Inc. 0.8% AvalonBay Communities Inc. 0.8% Amdocs Ltd. 0.79% Tyson Foods Inc. 0.74% Newmont Mining Corp. 0.73% Realty Income Corp. 0.7% Markel Corp. 0.7% Nielsen Holdings Plc. 0.7 Arch Capital Group Ltd % 7.57% 7.7% 6.03% Beta US ETF S&P 500 SCIU SECTOR OVERWEIGHT/UNDERWEIGHT VS. S&P 500 Source: Global X Funds, Bloomberg and S&P. 6.97% 4.%.6%.43% 0.% S&P 500 INDEX TOP 0 HOLDINGS Source: Global X Funds and S&P. As of 3/3/6. Total 7.84% Apple Inc. 3.37% Microsoft Corporation.43% Exxon Mobil Corporation.93% Johnson & Johnson.66% General Electric Company.65% Berkshire Hathaway Inc..48% Facebook Inc..46% AT&T Inc..34% Amazon.com Inc..8% Wells Fargo & Company.4% Source: Global X Funds, Bloomberg and S&P. Global X Scientific Beta US ETF -0.4% 4% -.33% S&P % 4% Overlap by weight between SCIU and S&P Number of overlapping 85% Holdings in SCIU also in S&P 500 8% Holdings in S&P 500 also in SCIU 59% Active share -3.9% -7.7%

3 Europe ETF SCID SINCE INCEPTION¹ PERFORMANCE AS OF 3/3/06 4% -4% -8% -% -6% -.78% - -4% Europe ETF SciBeta Extended Developed Europe Multi-Beta Multi-Strategy ERC STOXX Europe 600 May 5 Jun 5 Oct 5 Jan 6 Mar 6 Source: ERI Scientific Beta and Bloomberg, March % -0.4% High -0.88% -.0% Mid Cap % SCID HISTORICAL ALLOCATION SINCE INCEPTION¹ Source: ERI Scientific Beta, March % 9.88% % 8.55% 7.58% 7.68% 34.39% 33.88% 0.03% % -6.54% 9.9% 33.84% 8.33% 8.54% -.0% SCID -5.6% -.47% -4.73% -5.6% STOXX Europe % Q 05 Q3 05 Q % 38.38% 7.35% 5.9% SCID TOP 0 HOLDINGS Source: Global X Funds and STOXX. Total 6.6 Swiss Prime Site AG 0.85% Hiscox Ltd. 0.75% Flughafen Zuerich AG 0.7% PSP Swiss Property AG 0.66% Cofinimmo SA 0.63% Direct Line Insurance Group Plc. 0.63% Endesa SA 0.6 Vonovia SE 0.6 Chocoladefabriken Lindt & Sprüngli AG 0.59% UCB SA 0.58% % Beta Europe ETF 6.49% % 9.76% STOXX Europe % 0.64% 0.09% Total 6.44% Nestle SA.93% Novartis AG.5% Roche Holding AG.3% HSBC Holdings PLC.5 TOTAL SA.37% British American Tobacco PLC.34% Novo Nordisk A/S.7% Royal Dutch Shell PLC.5% GlaxoSmithKline PLC.% Bayer AG.9% Source: Global X Funds, Bloomberg and S&P. Global X Scientific Beta Europe ETF -0.7% 4% SCID SECTOR OVERWEIGHT/UNDERWEIGHT VS. STOXX EUROPE 600 INDEX Source: Global X Funds, Bloomberg and STOXX. STOXX EUROPE 600 INDEX TOP 0 HOLDINGS Source: Global X Funds and STOXX. STOXX Europe % 4% Overlap by weight between SCID and STOXX Europe # of overlapping 95% Holdings in SCID also in benchmark 9% Holdings in Benchmark also in SCID 58% Active share -.88% -4.9% -5.93% Since inception of SCID ETF, 5//5. index is represented by the Scientific Beta Multi-Strategy for the relevant region. The index represents the performance of the Scientific Beta Multi-strategy weighting scheme without apply factor tilts.

4 Asia Ex-Japan ETF SCIX SINCE INCEPTION¹ PERFORMANCE AS OF 3/3/ Asia ex-japan ETF SciBeta Developed Asia-Pacific ex-japan Multi-Beta Multi-Strategy ERC MSCI Pacific ex-japan May 5 Aug 5 Oct 5 Jan 6 Mar 6 Source: ERI Scientific Beta and Bloomberg, March 06 6.% -7.93%.7% -0.54%.76% -4.6 SCIX HISTORICAL ALLOCATION SINCE INCEPTION¹ Source: ERI Scientific Beta, March % 5.73% 9.6% 7.36% % 9.48% 7.6% Low Volatility 4.3% -0.7% ² 6.38% 6.48%.5% 5.89% 4.6% SCIX -8.87%.8% -8.87% -9.8% -.88% -.88% MSCI Pacific ex-japan Q 05 Q3 05 Q % 7.09%.49% 4.96% SCIX TOP 0 HOLDINGS Source: Global X Funds and MSCI. Total 9.79% Yue Yuen Industrial Holdings Ltd..7% Auckland International Airport Ltd..3% Infratil Ltd..09% Fortune Real Estate Investment Trust.03% Vitasoy International Holdings Ltd. 0.93% Fisher & Paykel care Corp. 0.87% Johnson Electric Holdings Ltd. 0.87% Transport International Holdings 0.87% EBOS Group Ltd. 0.84% Cheung Kong Infrastructure Holdings % 5.05% Asia ex-japan ETF.85% MSCI Pacific ex-japan 0.74% Total 36.79% Commonwealth Bank of Australia 6.88% Westpac Banking Corp. 5.4% AIA Group Ltd. 4.77% National Australia Bank Ltd. 3.7% Australia & New Zealand Banking Group 3.67% BHP Billiton Ltd..9% CSL Ltd..54% Wesfarmers Ltd..5% CK Hutchison Holdings Ltd..45% Hong Kong Exchanges and Clearing Ltd..93% Source: Global X Funds, Bloomberg and ishares. Global X Scientific Beta Asia ex-japan ETF 4% MSCI Pacific ex-japan SCIX SECTOR OVERWEIGHT/UNDERWEIGHT WITH MSCI PACIFIC EX-JAPAN INDEX Source: Global X Funds, Bloomberg and MSCI..07% 4.97% 4.79%.9%.55% Since inception of SCIX ETF, 5//5. MSCI Daily Net Total Return Asia Pacific ex-japan USD 3 index is represented by the Scientific Beta Multi-Strategy for the relevant region. The index represents the performance of the Scientific Beta Multi-strategy weighting scheme without apply factor tilts. MSCI PACIFIC EX-JAPAN INDEX TOP 0 HOLDINGS Source: Global X Funds and MSCI. 4% Overlap by weight between SCIX and MSCI Pacific ex-japan 30 # of overlapping 34% Holdings in SCIX also in benchmark 85% Holdings in Benchmark also in SCIX 76% Active share % -.3% -.07% -0.9%

5 Japan ETF SCIJ SINCE INCEPTION¹ PERFORMANCE AS OF 3/3/06 5% -5% - -5% - -5% Japan ETF SciBeta Japan Multi-Beta Multi-Strategy ERC MSCI Japan May 5 Jul 5 Oct 5 Jan 6 Mar 6 Source: ERI Scientific Beta and Bloomberg, March % -4.77% -0.4% -.3% 0.3% 3.88% SCIJ HISTORICAL ALLOCATION SINCE INCEPTION¹ Source: ERI Scientific Beta, March % 4.5% % 34.8%.8.94% 9.5% 9.63% 0.4% 5.5 Low Volatility % % 38.63% 0.65% % -.45% SCIJ -6.5% -0.% -0.54% MSCI Japan Q 05 Q3 05 Q4 05.3% 39.34% 0.94% 8.59% SCIJ TOP 0 HOLDINGS Source: Global X Funds and MSCI. As of 3/3/6 Total 7.0% Yamazaki Baking Co Ltd. 0.95% Nippon Accommodations Fund Inc. 0.75% Sumitomo Osaka Cement Co Ltd. 0.73% Matsumotokiyoshi Holdings Co Ltd. 0.69% IT Holdings Corp. 0.68% Otsuka Holdings Co Ltd. 0.66% Konami Holdings Corp. 0.65% Maruichi Steel Tube Ltd. 0.64% Mori Hills REIT Investment Corp. 0.64% Sankyo Co Ltd. 0.63% 9.98%.8 Beta Japan ETF 6.48% 4.56%.08% 3.64% MSCI Japan 4.8% 0.8% 0.39% 0.3% Total 9.73% Toyota Motor Corp. 5.35% Mitsubishi UFJ Financial Group.% KDDI Corp..75% Japan Tobacco Inc..7% SoftBank Group Corp..7% Honda Motor Co Ltd..67% Sumitomo Mitsui Financial Group.44% Takeda Pharmaceutical Co Ltd..35% Mizuho Financial Group Inc..3% Sony Corp..% Source: Global X Funds, Bloomberg and MSCI. 33% Beta Japan ETF SCIJ SECTOR OVERWEIGHT/UNDERWEIGHT WITH MSCI JAPAN INDEX Source: Global X Funds, Bloomberg and MSCI. Since inception of SCIJ ETF, 5//5. MSCI Daily Net Total Return Japan USD 3 index is represented by the Scientific Beta Multi-Strategy for the relevant region. The index represents the performance of the Scientific Beta Multi-strategy weighting scheme without apply factor tilts. MSCI JAPAN INDEX TOP 0 HOLDINGS Source: Global X Funds and MSCI. As of 3/3/6 MSCI Japan -.08% 33% Overlap by weight between SCIJ and MSCI Japan 73 # of overlapping 59% Holdings in SCIJ also in benchmark 86% Holdings in benchmark also in SCIJ 66% Active share -.3% -4.97% -5.3%

6 Definitions: The objective of the Scientific Beta Multi-Beta Multi-Strategy Equal Risk Contribution es (USA, Japan, Extended Developed Europe, Asia ex-japan) is to represent the performance of large and medium capitalization companies from their respective regions while outperforming the capitalization-weighted reference index for that region, with a limited amount of relative risk against that reference. The S&P 500 is an index of 500 stocks chosen by factors such as market size, liquidity and industry grouping. The is designed to be a leading indicator of U.S. equities and is meant to reflect the risk/return characteristics of the large-cap universe. The STOXX Europe 600 is derived from the STOXX Europe Total Market (TMI) and is a subset of the STOXX Global 800. With a fixed number of 600 components, the STOXX Europe 600 represents large, mid and small capitalization companies across 8 countries of the European region: Austria, Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. The MSCI Pacific ex Japan captures large and mid cap representation across 4 of 5 Developed Markets (DM) countries in the Pacific region (excluding Japan). With 50 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. The MSCI Japan is designed to measure the performance of the large and mid cap segments of the Japanese market. With 38 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in Japan. Active Share is the percentage of in a portfolio that do not overlap with the benchmark index. fully consider the Funds investment objectives, risk factors, charges and expenses before investing. This and additional information can be found in the Funds summary or full prospectus, which may be obtained by calling -888-GX-FUND- ( ), or by visiting Read the prospectus carefully before investing. Investing involves risk, including the possible loss of principal. In addition to the normal risks associated with investing, international investments may involve risk of capital loss from unfavorable fluctuation in currency values, from differences in generally accepted accounting principles or from economic or political instability in other nations. The Funds are non-diversified. For the Scientific Beta Japan ETF, the Japanese economy may be subject to considerable degrees of economic, political and social instability, which could have a negative impact on Japanese securities. In addition, Japan is subject to the risk of natural disasters, such as earthquakes, volcanoes, typhoons and tsunamis, which could negatively affect the Fund. Diversification may not protect against market risk. There is no assurance the goals of the strategy discussed will be met. Shares are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Global X NAVs are calculated using prices as of 4:00 PM Eastern Time. The closing price is the Mid- Point between the Bid and Ask price as of the close of exchange. EDHEC Risk Institute Asia Ltd. indexes have been licensed for use by Global X Management Company, LLC. Global X Funds are not sponsored, endorsed, issued, sold, or promoted by EDHEC Risk Institute Asia Ltd. nor does this company make any representations regarding the advisability of investing in the Global X Funds. Global X Management Company, LLC serves as an advisor to the Global X Funds. The Funds are distributed by SEI Investments Distribution Co., One Freedom Valley Drive, Oaks, PA, 9456, which is not affiliated with Global X Management Company, LLC.